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Union Pacific Reports Record First Quarter Earnings

Omaha, Neb., April 24, 2008 
Union Pacific Corporation (NYSE: UNP) today reported 2008 first quarter net income of $443 million, or $1.70 per diluted share, compared to $386 million, or $1.41 per diluted share in the first quarter of 2007.

First Quarter 2008 Records

Fully diluted earnings per share increased 21 percent to $1.70.

Operating revenue totaled $4.3 billion, up 11 percent.

Operating income grew 10 percent to $788 million.

Net income increased 15 percent to $443 million.

“Overall, it was a solid quarter for us as we converted profitable revenue growth and reliable, efficient service into record earnings despite a soft economic environment,” said Jim Young, Chairman and Chief Executive Officer.

2008 First Quarter Summary

In the first quarter of 2008, Union Pacific reported operating income of $788 million compared to $719 million in first quarter of 2007, a 10 percent improvement.

The Company’s freight revenue grew 11 percent in 2008 to a quarterly best of $4.1 billion. All six business groups posted record first quarter revenue, while three groups, Agricultural, Chemical and Energy, set all-time marks. The main driver of revenue growth was an 11 percent increase in average revenue per car (ARC), which reached a quarterly record of $1,738 per car in the first quarter 2008. Core pricing gains and greater fuel cost recovery each contributed approximately half of the overall ARC increase.

Business volumes in the first quarter of 2008, as measured by total revenue carloads, were flat at 2.3 million.

The Railroad’s 2008 average quarterly fuel price, including transportation and taxes, was up 47 percent to $2.84 per gallon compared to $1.93 in 2007.

The Company’s fuel consumption rate, as measured by gallons per thousand gross ton-miles, was a first quarter-best rate of 1.283 versus 1.302 in the first quarter 2007.

The effective tax rate in the first quarter of 2008 was 35.5 percent reflecting a state tax law change, which resulted in a one-time after tax earnings increase of $16 million.

The Company repurchased nearly 3.3 million common shares at an average share price of $123.67 in the first quarter of 2008. The year-over-year reduction in the weighted average diluted shares outstanding drove a 5 percent increase in fully diluted earnings per share.

First Quarter 2008 Freight Revenue Summary versus 2007

Agricultural up 24 percent

Energy up 17 percent

Chemicals up 11 percent

Intermodal up 5 percent

Industrial Products up 4 percent

Automotive up 3 percent

Second Quarter Outlook

"Although we expect continued challenges from a soft economy and high diesel fuel prices in the Second Quarter and beyond, we’re confident about our future,” Young said. “Union Pacific’s ongoing focus on yield, productivity and service should result in a record 2008.”

Union Pacific Corporation owns one of America’s leading transportation companies. Its principal operating company, Union Pacific Railroad, is the largest railroad in North America, covering 23 states across the western two-thirds of the United States. A strong focus on quality and a strategically advantageous route structure enable the company to serve customers in critical and fast growing markets. It is a leading carrier of low-sulfur coal used in electrical power generation and has broad coverage of the large chemical-producing areas along the Gulf Coast. With competitive long-haul routes between all major West Coast ports and eastern gateways, and as the only railroad to serve all six major gateways to Mexico, Union Pacific has the premier rail franchise in North America.

Contact for investors is Jennifer Hamann at 402-544-4227.
Contact for media is Bob Turner at (402) 544-5255 or (402) 203-0194.

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This press release and related materials contain statements about the Corporation’s future that are not statements of historical fact, including specifically statements of management regarding economic conditions, the price of diesel fuel in the future, and the Corporation’s opportunities to achieve record financial performance for the year. These statements are, or will be, forward-looking statements as defined by the Securities Act of 1933 and the Securities Exchange Act of 1934. Forward-looking statements also generally include, without limitation, information or statements regarding: expectations as to continued or increasing demand for rail transportation services; expectations regarding operational improvements, including the effectiveness of network management initiatives that have been or will be implemented to improve operations, customer service, and shareholder returns; expectations as to increased returns, cost savings, revenue growth, and earnings; expectations regarding fuel price and our ability to mitigate fuel costs; the time by which certain objectives will be achieved, including expected improvements in operations and implementation of network management initiatives; estimates of costs relating to environmental remediation and restoration; proposed new products and services; expectations that claims, lawsuits, environmental costs, commitments, contingent liabilities, labor negotiations or agreements, or other matters will not have a material adverse effect on our consolidated financial position, results of operations, or liquidity; statements concerning projections, predictions, expectations, estimates or forecasts as to the Corporation’s and its subsidiaries’ business, financial, and operational results, and future economic performance; and statements of management’s beliefs, expectations, goals, and objectives and other similar expressions concerning matters that are not historical facts.

Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times that, or by which, such performance or results will be achieved. Forward-looking information, including expectations regarding operational and financial improvements and the Corporation’s future performance or results are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statement.

Important factors, including risk factors, could affect the Corporation’s and its subsidiaries’ future results and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements. Information regarding risk factors and other cautionary information are available in the Corporation’s Annual Report on Form 10-K for 2007, which was filed with the SEC on February 28, 2008. The Corporation updates information regarding risk factors if circumstances require such updates in its periodic reports on Form 10-Q and its subsequent Annual Reports on Form 10-K (or such other reports that may be filed with the SEC).

Forward-looking statements speak only as of, and are based only upon information available on, the date the statements were made. The Corporation assumes no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. If the Corporation does update one or more forward-looking statements, no inference should be drawn that the Corporation will make additional updates with respect thereto or with respect to other forward-looking statements. References to our Web site are provided for convenience and, therefore, information on or available through the Web site is not, and should not be deemed to be, incorporated by reference herein.

The statements and information contained in the news releases provided by Union Pacific speak only as of the date issued. Such information by its nature may become outdated, and investors should not assume that the statements and information contained in Union Pacific's news releases remain current after the date issued. Union Pacific makes no commitment, and disclaims any duty, to update any of this information.